The International Monetary Fund (IMF) has asked the Pakistani Government to take even more measures on the taxation front to increase the revenue collection on a short term basis to stabilize the economy.
IMF’s Resident Chief in Pakistan, Teresa Daban Sanchez, said that the IMF was still evaluating the recent finance supplementary (second amendment) bill presented by the government, reported an English Daily.
Our understanding is that it includes a set of tax, administrative and regulatory measures aimed at lifting distortions that could foster private sector activities. Further measures are needed to increase revenue collection in the short term to support efforts to stabilize the economy.
The Federal Board of Revenue (FBR) has estimated a revenue loss of Rs. 6.8 billion because due to the relief measures taken by the government through the new bill. This comes at a time when the tax collection machinery is already facing a revenue shortfall of Rs. 158 billion in the first half (July-Dec) of the current fiscal year.
The government did not bring any change in the annual tax collection target of Rs. 4,398 billion for the current fiscal year 2018-19.
So far, the FBR has sent 3,121 notices to high net worth individuals in four phases out of which it has received 154 tax returns with a tax collection of Rs. 21.1 million.
The FBR’s tax collection has so far collected Rs. 1,894 billion in the first six months of the current fiscal year against the desired target of Rs. 2,052 billion for this period.
Now the FBR will have to collect Rs. 2,504 billion in the second half (January-June) period to meet the desired tax collection target on June 30, 2019.
With the forecast budget deficit target of 5.1 percent of the GDP, the FBR will have to make efforts to achieve the desired tax collection target.
However, the finance minister Asad Umar, in a press conference, admitted that the supplementary budget and economic reforms will not have a major impact on the budget and current account deficit.
Via: The News